Farmers won’t need to re-evaluate their business plans with the Bank of Canada’s signal to hike interest rates. But it’s a sign of increases to come and farmers need to look at their long-term plans.

That’s according to Farm Credit Canada’s Chief Agricultural Economist, J.P. Gervais. Gervais told Farmers Forum that the industry is in a good position to handle the increase. “It would be terrible if we didn’t have room to deal with a 0.25 per cent increase (in the lending rate.) I think we’re set up for success, but it’s something a lot of producers aren’t used to seeing.”

As rates go up, it’s going to affect the industry across sectors, touching down on everything from raising beef to growing crops to milking cows, Gervais said. If there are any farmers that need to be more concerned about the increase and what it suggests is coming, it’s newer producers who are taking on more debt.

But farming in general is a capital-intensive industry, so there’s no getting away from the effects, Gervais said. One area it’s going to hit in particular is one where Ontario farmers have long enjoyed benefits: The value of the dollar. “Farm incomes are near-record high, and the outlook (for farming) is positive everywhere in the country. One of the drivers (of that) is the dollar.”

The Bank of Canada announced it was pushing up the overnight target rate to 0.75 per cent on July 12, which banks use to set their prime interest rate, and the Canadian dollar edged up to US 79 cents.